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Efraim Diveroli
"I don't care if I have the smallest dick in the room, as long as I have the fattest wallet." '' - Efraim Diveroli '''Efraim Diveroli '(born December 20, 1985) is an American former arms dealer and author. His company, AEY Inc., was a major weapons contractor for the U.S. Department of Defense. After AEY illegally provided 42-year-old substandard and unserviceable Chinese ammunition and attempted to re-brand and re-package it, thus violating the American arms embargo against China, the company was suspended by the U.S. government for violating it's contract. As a result of the publicity surrounding the contract and the age of the arms dealers - Diveroli being 21 while his partner David Packouz 25 when AEY landed the ammunition deal - the United States Army began a review of it's contracting procedures. This contract AEY bidded on became known in popular culture as the Afghan Deal. Diveroli was sentenced to four years in federal prison. He is the subject of the 2016 Todd Phillips drama comedy film War Dogs, in which he was portrayed by Jonah Hill, respectively. Early life Diveroli was born on December 20, 1985 in Miami Beach, Florida, the son of Ateret and Michael Diveroli. He has two brothers and two sisters: Aaron, Avrohom, Avigail and Yeshaya. The family was Orthodox Jewish, strictly observing all traditional Jewish laws. Efraim's grandfather, Yoav Botach, is one of the wealthiest property owners in Los Angeles, and his uncle, who he would briefly work for, is celebrity rabbi Shmuley Boteach. Later in his life, while attending Beth Israel Congregation, Diveroli met David Packouz. Packouz was older by four years and was a skinny kid who was known to have worn a yarmulke and leave his white dress shirts untucked. Diveroli was the class clown, an overweight kid who had a big mouth and no sense of fear. The pair became close friends and would smoke marijuana on a daily basis everyday after school. They were also known to get into trouble on occasion (although this was more often Efraim), hang out at the beach with their friends, play the guitar and sneak in to swim in the pools at five-star hotels. Eventually, the friendship broke off once Diveroli was kicked out of high school; he then went to Los Angeles to work for his uncle, where the pair would seize guns and sell them back to law enforcement. AEY Inc. Formation of AEY After having a financial disagreement with his uncle, Diveroli returned home in March of 2001 at the age of sixteen. He explained to his father the situation with his uncle and told him he wanted to open a business specializing in firearms, ammunition trading, and defense contracts with the U.S. Government. He convinced his old man to sell him a shell company, AEY Inc., named after the first initials of him and his siblings, which his father had incorporated as a small printing business, but had not done anything with in years. Efraim showed a penchant for arms dealing and quickly made a name for himself within the industry. His young age and apparent talent led local media outlets to label him as an "arms wunderkind". Diveroli struggled with drug addiction and was also frequently labeled as a "stoner arms dealer" by the media. During the Cold War, the world was locked in an arms race. Millions of weapons were stashed throughout Eastern Europe, ready for a war with the west. Upon ending, with the immediate threat of violence subsiding, arms dealers started moving these vasts amounts of weapons. The sales that followed formed the "gray market" where legitimate government sanctioned buyers could procure arms illegally. "The Pentagon needed access to this new aftermarket in order to arm the militias it was creating in Iraq and Afghanistan. The trouble was, it couldn't go into such a murky underworld on it's own. It needed proxies to do it's dirty work - companies like ''AEY."'' Reuniting with Packouz It isn't quite known specifically how the pair came to reunite as friends, but it is initially believed that Efraim showed up at Packouz' place in his Mercedes and the two went to a local rabbi's house, where they were promised free booze and pretty girls. Diveroli was excited about a deal he had just completed, a $15 million contract to sell old Russian-manufactured rifles to the Pentagon in order to supply the Iraqi army. He regaled Packouz with the tale of how he had won the contract, how much money he was making and how much more there was to be made. Diveroli implored, "Dude, I've got so much work I need a partner. It's a great business, but I need a guy to come on board and make money with me." Packouz was intrigued. While supporting himself by working as a massage therapist in the Miami area, he was also doing online business himself, buying sheets from textile companies in Pakistan and reselling them to distributors that supplied nursing homes in Miami. The sums he made were tiny, but the experience made him hungry for more. After Diveroli shocked Packouz by explaining that by working in the arms business he had made $1.8 million in cash, Packouz was already on board, and soon became affiliated with the line of work. He was presumably introduced to Efraim's chief financier, Ralph Merrill, and business skyrocketed. Contracts Diveroli started working during this period of heavy arms trading as a teenager, with AEY headquartered in a one-room apartment in Miami. Equipped only with a laptop, he sought to enter the industry from the seat of his couch. He began surfing solicitations on fbo.gov, or FedBizOps, which is a government hosted website where contracts are posted. He then started bidding on small contracts with the financial help of Ralph Merrill, with whom he did business during his time working for his uncle. At just eighteen, Diveroli became a self-made millionaire by continuing to beat out big corporations like Northrop Grumman, Lockheed and BAE Systems. Rolling Stone ''later claimed Efraim had "an appetite for risk and all-devouring ambition." After steadily increasing the size of his contracts and developing a track record of success, Diveroli's company, AEY Inc., was awarded a $298 million contract by the Pentagon to provide arms and munitions to the allied forces in Afghanistan. In order to fulfill the U.S. government's contracts, Diveroli soon found himself dealing with dubious weapons traders, crooked diplomats, and soldiers of fortune; negotiating deals with foreign defense ministers, holding meetings at embassies, and taking calls from high-ranking Army officials. On March 27, 2008, the U.S. government suspended AEY Inc. for infringing upon the terms of it's contract; in violation of a pre-existing arms embargo, the company was officially accused of supplying AK-47 ammunition manufactured in China to the Afghan National Army and police. A contract that AEY would dub the '''Afghan Deal'. ''United States Army documents showed that the company totaled more than $200 million in contracts to supply ammunition, assault rifles, and other weapons in 2007. As a result of publicity surrounding the contract, the U.S. Army began a review of it's contracting procedures. The United States House Committee on Oversight and Government Reform ruled the ammunition "unserviceable". AEY had also failed to perform on numerous previous contracts, including sending potentially unsafe helmets and failure to deliver 10,000 Beretta pistols to Iraq. Diveroli's former partner David Packouz, and Ralph Merrill, the group's former chief financier, later filed separate lawsuits against Diveroli seeking payment of millions of dollars they say they were owed in connection to the weapons contract with the U.S. government. Trial and Conviction While Diveroli awaited trial for conspiracy, a company he owned, Ammoworks, continued selling arms. In late August 2008, he pleaded guilty on one count of conspiracy and was sentenced to four years in prison on January 4, 2011. He was further sentenced after he was found in possession of a firearm while out on bond, and his overall sentence reduced for assisting in the investigation of the offense. Diveroli's former partner, David Packouz, was sentenced to seven months house arrest while Ralph Merrill was also given a four year prison sentence. Another stoner friend who worked with AEY Inc. briefly during the Afghan Deal was Alex Podrizki, who took a plea deal and was given ten months probation. Efraim Diveroli was released in August 2014. ''War Dogs '' The story of Diveroli's arms deals is the subject of the Todd Phillips comedy/drama film ''War Dogs, starring Jonah Hill as Diveroli and Miles Teller as his partner, David Packouz. In 2016,